August 17, 2021

Daily U.S. Session Watchlist: NZD/USD

 Uncle Sam is printing its retail numbers today!

Will the report finally kill NZD/USD’s range support?

Before moving on, ICYMI, today’s Asia-London session watchlist checked out EUR/GBP’s Fibonacci and divergence levels ahead of data releases from the U.K. and the Eurozone. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Fed’s Eric Rosengren backs tapering in the fall but no rate hikes until job market improves

Minutes: RBA “prepared to act” if virus spread sets back Australia recovery

UK payrolls move closer to pre-pandemic level – ONS

New Zealand’s Ardern orders nationwide lockdown over one COVID-19 case

Asia shares ease on worries over China crackdown, COVID-19 spike

Australia, NZ dollars skid as coronavirus spread upends policy bets

Upcoming Potential Catalysts on the Economic Calendar:

Eurozone’s flash employment change at 9:00 am GMT

Eurozone’s flash GDP report at 9:00 am GMT

Canada’s housing starts at 12:15 pm GMT

U.S. retail sales at 12:30 pm GMT

U.S. industrial production at 1:15 pm GMT

Fed’s Powell to give a speech at 5:30 pm GMT

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.

What to Watch: NZD/USD

In case you missed it, the Kiwi got clobbered across the board earlier today after New Zealand PM Jacinda Ardern announced a nationwide lockdown after the country recorded ONE case of local transmission. The lockdown will run for seven days in Auckland where the case was discovered and seven days for the rest of the country.

The surprising decision took the wind out of NZD’s sails, which was a favorite ahead of the Reserve Bank of New Zealand (RBNZ)’s policy decision this week.

NZD/USD is now trading at the .6920 level that’s close to a range support that has been around since late June.

Will today’s U.S. retail sales release finally break NZD/USD’s months-long range? Word around is that the report would print a lower figure. Not exactly an incentive for the Fed to taper its easy policies anytime soon.

And then there’s the actual RBNZ decision, which is scheduled just after the U.S. session. Will the central bank raise its rates as markets are expecting?

More dollar demand could drag NZD/USD below its range support to possibly retest the .6800 previous resistance zone.

But if traders realize that new lockdown is only three days for most of New Zealand, then NZD/USD could regain support and go back to the .7000 mid-range area.